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Deutsche Bahn warns of worst-ever loss due to pandemic

German State-owned rail operator Deutsche Bahn warned Tuesday that the coronavirus has plunged it into its worst-ever financial crisis despite billions in government aid, sayings talks with worker representatives to find savings will begin this week.

Deutsche Bahn warns of worst-ever loss due to pandemic
A DB worker cleaning a train in Dortmund. Photo: DPA

Chief executive Richard Lutz wrote to employees in a letter seen by AFP that the state group is bleeding cash “in the three-digit-millions” each month, a situation set to persist until at least December.

“In the current business year, this will lead to the biggest operating loss in the history of DB,” Lutz said, adding that “we expect impacts totalling billions stemming from the coronavirus in the following years too.”

A massive plunge in traffic, in part down to travel restrictions imposed by the German government to control the coronavirus' spread, has sapped DB's revenues.

Since then, ministers have agreed that passenger numbers should “double” by 2030 as part of a broader scheme to boost rail transport.

Politicians see building up DB as a way to slash the environmental impact of Germany's highly polluting transport sector.

In early June, Berlin stepped in with around €5 billion ($5.6 billion) to keep the struggling rail operator afloat.

READ ALSO: Germany plans massive cash injection for corona-hit Deutsche Bahn

But bosses now have to find savings to clean up their finances, including €2 billion of labour costs.

“All stakeholders have to be part of the solution. Board members and managers, but also all employees,” CEO Lutz said, trailing talks with rail workers' union EVG to begin this week.

EVG has reassured workers that layoffs are ruled out for now after signing a deal with executives earlier this month.

A January agreement between DB and Berlin calls for 62 billion euros of additional government investment and 24 billion euros from the rail company itself by 2030.

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TRAVEL

Could sleeper trains offer Germans cheap, low-carbon travel across Europe?

Several political parties in Germany have said they want to bring back sleeper trains in order to meet carbon emissions targets.

Could sleeper trains offer Germans cheap, low-carbon travel across Europe?
A sleeper train in Austria. Photo: dpa/APA | Georg Hochmuth

The Green party have said that they want to put state subsidies into night trains that will connect Germany with cities as far flung as St Petersburg in the north and Lisbon in the south.

According to the environmentalist party’s plans, 40 night rail lines could connect 200 destinations across the continent including islands like Mallorca, which would be linked in by train and ferry.

The Greens want the EU to buy a fleet of sleeper trains that could travel at speeds of between 200 km/h and 250 km/h.

The CDU have also announced plans to rebuild the country’s sleeper train services.

Deutsche Bahn stopped its last sleeper service in 2016 citing the high costs involved in maintaining its fleet that was not recuperated through ticket sales.

Earlier this year the state owned company said it had “no plans” to purchase new sleeper wagons.

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